Exceptional high-value diamonds from Lesotho’s Letšeng mine have boosted Gem Diamonds’ financial performance, prompting the miner to increase its production and sales forecasts for 2026.

Gem Diamonds (LSE: GEMD) has upgraded its full-year 2026 production and sales guidance following a strong third quarter, with several exceptional large diamonds contributing significantly to revenue.

The Africa-focused diamond producer now expects to recover between 78,000 and 80,000 carats during 2026, up from its previous forecast of 75,000 to 78,000 carats. Sales guidance has also increased to between 79,000 and 81,000 carats.

The improved outlook highlights the continuing importance of exceptional, high-value rough diamonds in an industry where the quality and rarity of individual stones can have a far greater financial impact than overall production volumes.

Exceptional diamonds drive revenue growth

Gem Diamonds reported third-quarter revenue of US$34.8 million, representing a 35% increase compared with US$25.7 million in the same period last year.

Interestingly, this growth occurred despite a 22% decline in carats sold, which fell from 22,830 to 17,899 carats.

The average realised selling price increased by an impressive 73%, reaching US$1,945 per carat, compared with US$1,124 a year earlier.

Four exceptional diamonds each sold for more than US$1 million, generating combined proceeds of US$22.2 million, accounting for almost 64% of the company’s quarterly revenue.

Among these stones was the remarkable 347-carat Lesotho Jubilee, a white Type II diamond recovered in June and sold during the third quarter.

<em>The 347-carat Lesotho Jubilee, recovered at the Letšeng mine in Lesotho.</em>

The results demonstrate the extraordinary influence that rare, large diamonds can have on a mining company’s financial performance. While overall production and sales volumes remain important, the discovery of even a single exceptional stone can substantially influence quarterly revenue and profitability.

Letšeng mine production

Recoveries at Gem Diamonds’ Letšeng mine in Lesotho totalled 19,299 carats during the third quarter, down 13% from 22,268 carats in the corresponding period last year.

Three diamonds weighing more than 100 carats were recovered during the quarter, bringing the year-to-date total of stones exceeding this size to six.

Mining and processing operations remained concentrated on the Main Pipe, while preparations continued for the next phase of development at the Satellite Pipe.

CEO Clifford Elphick said September’s rough diamond sales achieved good prices, with the results further supported by the sale of the 347-carat Lesotho Jubilee. He described the results as encouraging indicators that demand and prices for Letšeng-quality diamonds remain firm.

Financing and changes to Lesotho’s diamond royalties

Gem Diamonds is also finalising commercial terms with Nedbank and Standard Bank to renew its revolving credit facilities before their scheduled expiry on 21 December 2026.

The company has welcomed the Lesotho Government’s proposed introduction of a variable diamond royalty rate ranging between 3% and 6%, describing the change as a positive step towards the long-term sustainability of mining operations.

Despite the improved production and revenue outlook, Gem Diamonds shares declined 14.2% to 12.44 pence during mid-afternoon trading in London, valuing the company at approximately £17.4 million.

The importance of exceptional diamonds

Gem Diamonds’ latest results provide a clear reminder that the diamond industry’s value is not measured by carat weight alone.

Large, rare and exceptional-quality diamonds occupy a distinct segment of the market, where colour, clarity, crystal structure, size and rarity can have a substantial influence on value.

For diamond owners and buyers alike, understanding these characteristics requires specialist knowledge and professional assessment.

At the Diamond Certification Laboratory of Australia (DCLA), diamond identification, grading and certification provide an independent assessment of a diamond’s characteristics, helping owners better understand the qualities that contribute to its value.